LITTLE ROCK — The X-Mart Adult Superstore in Clarksville can challenge the validity and constitutionality of that city’s ordinance regulating sexually oriented businesses, the state Supreme Court ruled Thursday.

The high court overturned a Johnson County circuit judge’s dismissal of the businesses’ challenge to the ordinance and sent the case back to circuit court for new proceedings.

The Clarksville City Council passed the ordinance on Jan. 25, 2006, three weeks after X-Mart opened its doors. Under the ordinance, a sexually oriented business is required to obtain a license and pay certain fees, with violations punishable by up to a year in jail and a $1,000 fine.

The ordinance also establishes signage restrictions, restricts the location of a sexually oriented businesses to the city’s industrial districts and requires that a sexually oriented business be at least 750 feet from the other sexually oriented businesses, businesses licensed to sell alcohol, houses of worship, daycare centers, schools, bars and residences.

The ordinance allows businesses that were already in existence at the time it was passed to continue operating for three years before they are considered to be out of compliance. Businesses can apply for and receive six month extensions if they can show a financial hardship.

When the three-year period ended for X-Mart, the corporation that operates it, 40 Retail, applied for and received a six-month hardship extension. The extension expired on July 17, 2009, and 40 Retail did not apply for another extension.

On Sept. 14, 2009, the city of Clarksville filed a lawsuit seeking a court order to shut down the store. The company filed a counterclaim alleging that the ordinance was invalid because it was not enacted in accordance with statutory notice procedures and it violated the Arkansas Civil Rights Act and the U.S. Constitution.

The company argued that the ordinance was unconstitutional because it violated its right to free expression and unfairly targeted one type of business. It said the ordinance did not provide a sufficient number of sites where an adult business would have a reasonable opportunity to operate, unfairly required applicants to appear in person when applying for a license and unfairly prohibited pictorial representations on signs.

The company also argued that the city could not show evidence of adverse effects resulting from the store’s operation.

The city argued that 40 Retail had already acquiesced to the provisions of the ordinance for three years and had applied for a six-month hardship extension, so it could not challenge the ordinance.

On Jan. 5, 2012, a Johnson County circuit judge granted a motion by the city for summary judgment and dismissed 40 Retail’s counterclaim.

In a per curiam order Thursday overturning the judge’s ruling, the Supreme Court said a party that seeks to retain a benefit from a governmental act may be prevented from simultaneously challenging the burdens imposed by the act, but Clarksville’s ordinance on sexually oriented businesses did not provide any benefits to 40 Retail.

"On the contrary, it imposed significant burdens," the court said in the order.

The court said that although 40 Retail did obtain a six-month extension that allowed it to continue operating, it did so to avoid criminal sanctions, so "it cannot be said that 40 Retail’s acceptance of the temporary hardship extension was voluntary in any real sense."